Wealth File #11
Rich people choose to get paid based on results. Poor people choose to get paid based on time.
Have you ever heard this advice: “Go to school, get good grades, get a good job, get a steady paycheck, be on time, work hard . . . and you’ll live happily ever after”? I don’t know about you, but I’d sure love to see the written guarantee on that one.Unfortunately, this sage advice comes directly from the Book of Fairy Tales, Volume I, right after the tooth fairy story. I’m not going to bother debunking the entire statement.You can do that for yourself by checking your own experience and the lives of everyone around you. What I will discuss is the idea behind the “steady” paycheck. There’s nothing wrong with getting a steady paycheck, unless it interferes with your ability to earn what you’re worth. There’s the rub. It usually does. WEALTH PRINCIPLE: There’s nothing wrong with getting a steady paycheck, unless it interferes with your ability to earn what you’re worth. There’s the rub. It usually does.Poor people prefer to be paid a steady salary or hourly wage.They need the “security” of knowing that exactly the same amount of money is coming in at exactly the same time,month in, month out. What they don’t realize is that this security comes with a price, and the cost is wealth. Living based in security is living based in fear. What you’re actually saying is “I’m afraid I won’t be able to earn enough based on my performance, so I’ll settle for earning just enough to survive or to be comfortable.” Rich people prefer to get paid based on the results they produce, if not totally, then at least partially. Rich people usually own their own business in some form. They make their income from their profits. Rich people work on commission or percentages of revenue. Rich people choose stock options and profit sharing in lieu of higher salaries. Notice there are no guarantees with any of the above. As stated earlier, in the financial world the rewards are usually proportionate to the risk. Rich people believe in themselves. They believe in their value and in their ability to deliver it. Poor people don’t. That’s why they need “guarantees.” Recently, I dealt with a public relations consultant who wanted me to pay her a fee of $4,000 per month. I asked her what I’d receive for my $4,000. She replied that I’d see at least$20,000 of coverage per month in the media. I said, “What if you don’t produce those results or anything close to it?” She answered that she would still be putting in the time, so she deserved to get paid. I replied, “I’m not interested in paying for your time. I’m interested in paying you for a specific result, and if you don’t produce that result, why should I pay you? On the other hand,if you produce even greater results, you should get paid more.Tell you what: I’ll give you fifty percent of whatever media value you produce.
According to your figures, that would mean paying you ten thousand dollars per month,which is more than double your fee.” Did she go for it? Nope! Is she broke? Yup! And she will before the rest of her life or until she figures out that to get rich you will need to be paid based on results. Poor people trade their time for money. The problem with this strategy is that your time is limited. This means that you invariably end up breaking Wealth Rule #1, which states,“Never have a ceiling on your income.” If you choose to get paid for your time, you are pretty much killing your chances for wealth.
WEALTH PRINCIPLE:
Never have a ceiling on your income. This rule also applies to personal service businesses, where,again, you generally get paid for your time.
That’s why lawyers,accountants, and consultants who are not yet partners in their firm—and therefore don’t share in the business profits—make a moderate living at best. Suppose you are in the pen business and you get an order for fifty thousand pens. If this were the case, what would you do? You’d simply call your supplier, order fifty thousand pens,send them off, and happily count your profits. On the other hand, suppose you are a massage therapist and you’re fortunate enough to have fifty thousand people lined up outside your door all wanting a massage from you. What do you do? You kill yourself for not being in the pen business.What else can you do? Try explaining to the last person in line that you may be running “a little late,” as in their appointment is Tuesday at 3:15, four decades from now!
I’m not suggesting there’s anything wrong with being in a personal service business. Just don’t expect to get rich anytime soon unless you create a way to duplicate or leverage yourself. At my seminars, I often meet salaried or hourly wage employees who complain to me that they’re not getting paid what they’re worth. My response is “In whose opinion? I’m sure your boss thinks you’re being compensated fairly. Why don’t you get off the salary treadmill and ask to be paid based fully or partially on your performance? Or, if that is not possible,why not work for yourself ? Then you’ll know you’re making exactly what you’re worth.” Somehow, this advice doesn’t seem to appease these people, who are obviously terrified of testing their “true” value in the marketplace. The fear most people have of being paid based on their results is often just a fear of breaking out of their old conditioning. In my experience, most people who are stuck in the steady-paycheck rut have past programming that tells them this is the “normal” way to get paid for your work. You can’t blame your parents. (I guess you can if you’re a good victim.) Most parents tend to be overly protective, so it’s only natural for them to want their kids to have a secure existence. As you’ve probably already found out, any work that doesn’t provide a steady paycheck usually produces the infamous parental response “When are you going to get a real job?” I remember, when my parents asked me that question,thank goodness my reply was “Hopefully never!” My mother was devastated. My father, however, said, “Good for you.You’ll never get rich working on straight salary for someone else. If you’re going to get a job, make sure you get paid on percentage. Otherwise, go work for yourself !”
I too encourage you to work “for yourself.” Start your own business, work on commission, get a percentage of revenue or company profits, or get stock options. Whatever your vehicle,make certain you create a situation that allows you to get paid based on your results. Personally, I believe just about everyone should own their own business, be it full-time or part-time. The first reason is that by far, the vast majority of millionaires became rich by being in their own business. Secondly, it’s extremely difficult to create wealth when the tax man is grabbing almost half of everything you earn. When you own a business, you can save a small fortune in taxes by writing off a portion of your expenses for such things as your car, travel, education, and even your home. For that reason alone, it’s worth having your own business. If you don’t have a brilliant business idea, not to worry: you can use someone else’s. First, you can become a commissioned salesperson. Selling is one of the world’s highest paid professions. If you’re good, you can earn a fortune. Second,you can join a network marketing company. There are dozens of excellent ones, and they have in place all of the products and systems you need to get started immediately. For just a few bucks, you can become a distributor and have all the benefits of owning a business with few of the administrative hassles. If it resonates with you, network marketing can be a dynamite vehicle for wealth. But, and this is a big but, don’t think for a minute that you’re going to get a free ride. Network marketing will only work if you do. It will take training, time,and energy to succeed. But if you do, incomes in the range of$20,000 to $50,000 per month—that’s right, per month—are not uncommon. In any case, just signing up and becoming a part-time distributor will give you some excellent tax advantages, and who knows, maybe you’ll enjoy the product enough to offer it to others and end up making a nice income to boot. Another option is exchanging your “job” for a “contract”position. If your employer is willing, he or she can hire your company instead of you to do basically what you’re doing now.A few legal requirements have to be fulfilled, but for the most part, if you add one or two more clients, even part-time, you can get paid as a business owner instead of an employee and enjoy business-owner tax benefits. Who knows, those part-time clients may grow to become full-time clients, which would then give you the opportunity to leverage yourself, hire other people to get all the work done, and eventually you’ll be running your own full-on business. You might think, “My employer would never go for that.” I wouldn’t be too sure about that. You have to understand, it costs a company a fortune to have an employee. Not only do they have to pay salary or wages, but they have to pay a whack of money on top of that to the government, often to the tune of 25 percent or more above what the employee earns. Add to that the cost of the benefits package that most employees get,and you’ve probably got a 50 percent savings to a company that chooses to hire you as an independent consultant. Of course you won’t be eligible for many of the benefits you got as an employee, but for what you save in taxes alone, you can buy the best of what you need on your own. In the end, the only way to earn what you’re really worth is to get paid based on your results. Once again, my dad said it best: “You’ll never get rich working on straight salary for someone else. If you’re going to get a job, make sure you get paid on percentage. Otherwise, go work for yourself !” Now that’s sage advice!
DECLARATION:
Place your hand on your heart and say...
“I choose to get paid based on my results.”
Touch your head and say...
“I have a millionaire mind!”MILLIONAIRE MIND ACTIONS 1.
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